AMIN A N M RUHUL

ID-2020201004

Assignment on

Why were changes necessary in Hanna Andersson Corporation?

And Management ideas of 1990s.

(1) Why were changes necessary in Hanna Andersson Corporation?

Born from a desire to bring quality European-style children’s clothing to the United States,
Hanna Andersson Corporation has sold colorful clothing and accessories since 1983. The
company now boasts over $100 million in annual sales and employs over 500 people. Growing
from an exclusive mail-order catalog business in the early 1980s, today Hanna Andersson also
distributes products online, in 29 retail stores nationwide, and through select specialty retailers.

The considerable growth and development the business experienced did not come without its
challenges and necessary organizational change. In the 1990s and early 2000s, increased
competition from other retailers and the introduction of online commerce posed some challenges
for Hanna Andersson. The Denharts found themselves without a solid growth plan for the future.
They worried that they might have lost sight of market forces. Change was necessary if Hanna
Andersson was to remain viable.

Realizing the need for help and direction, the Denharts promoted from within the company to
help initiate change and strategic growth, and in 1995, Phil Iosca took the strategic lead as CEO.
Hanna Andersson was then sold to a private equity firm in 2001 and has since changed
ownership several times, leading to a new business direction for the company. In 2009, Hanna
Andersson began distributing merchandise wholesale through retail partners such as Nordstrom
and Costco. The implementation of each of these new distribution avenues required a great deal
of change within the company.

In early 2010, chief operating officer Adam Stone took over as CEO. He helped his company
weather yet another transition with a calm push for changes within the company. To help
understand different points of view at Hanna Andersson, Stone often sat in on inventory and
operational planning meetings. Step by step, Stone was able to break down work initiatives so
the continuing changes were not so overwhelming to the company and its valued employees.
Over time, his and other company leaders’ presence has helped employees make better, more
strategic decisions. Rather than resisting change, they now feel heard and understood.

The decision to sell wholesale turned out to be a good one, as it has enabled the company to
weather the recession’s negative effect on retail and online purchases. Accounting for
approximately 10% of total sales, the company’s wholesale business is expected to boost yearly
revenue by 5%. With more conscientious inventory purchases and strategic distribution
initiatives, Hanna Andersson has realized a higher sales volume, lower inventory at year-end and
less liquidation. Through it all, company management has done an effective job at interpreting
the desired growth goals of its owners while inspiring change within the company. With
continued clear communication, direction, and willingness to try new techniques, Hanna
Andersson is poised for growth and success in the future while not forgetting to take care of its
employees.

(2) Management Ideas of the 1990s

Peter Drucker was the first scholar to write about how to manage knowledge workers, with his
earliest work appearing in 1969. Drucker addressed topics like management of professionals, the
discipline of entrepreneurship and innovation, and how people make decisions. In 1982, Tom
Peters and Robert Waterman wrote In Search of Excellence, which became an international best
seller and ushered a business revolution by changing the way managers viewed their
relationships with employees and customers.

The book introduced nine principles of management that are embodied in excellent
organizations:

1. Managing Ambiguity and Paradox: The ability of managers to hold two opposing
ideas in mind at the same time and still be able to function effectively.
2. A Bias for Action: A cultures of impatience with lethargy and inertia that otherwise
leaves organization unresponsive.
3. Close to the Customer: Staying close to the customer to understand and anticipate
customer needs and wants.
4. Autonomy and Entrepreneurship: Actions that foster innovation and nurture customer
and product champions.
5. Productivity through People: Treating rank-and-file employees as a source of quality.
6. Hands-On, Value-Driven: A management philosophy that guides everyday practice and
shows management’s commitment.
7. Stick to the Knitting: Stay with what you do well and the businesses you know best.
8. Simple Form, Lean Staff: The best companies have very minimal, lean headquarters
staff.
9. Simultaneous Loose-Tight Properties (Peters & Waterman, 1982) Autonomy in shop
floor activities plus centralized values.

Following up, Peters wrote a Passion for Excellence, which placed further emphasis on
leadership, innovation, and valuing people. Peters urged organizational leaders to celebrate and
recognize employees for their contributions. His advice to leaders was to “master paradox”
(develop a level of comfort with complexity and ambiguity) and establish direction for the
company by developing an inspiring vision and leading by example.